Property Casualty Insurance - Consumer Record Report: What Insurers Must Do If They Turn You Down
Most insurers make use of claims databases when they underwrite insurance applications. Claims databases, like the Comprehensive Loss Underwriting Exchange (CLUE) operated by ChoicePoint, contain information about what type and number of insurance claims have been made by an individual. Typically, the databases cover claims made within a 5-year timeframe. Ninety-five percent of all claims are reported to claims databases.
When an adverse action is taken by an insurer —such as a decision to deny insurance, increase rates, or terminate a policy—and it is based solely or partly on information in a consumer report, Section 615(a) of the Fair Credit Reporting Act requires insurers to provide a notice of the adverse action to the consumer. The notice must include:
- the name, address, and telephone number of the consumer reporting agency (CRA) that supplied the consumer report, including the toll-free telephone number for credit bureaus that maintain files nationwide;
- a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and
- a notice of the individual’s right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer’s right to a free report from the CRA upon request within 60 days.
Find out more, and look at the FTC's pamphlet on what insurers must do (101K PDF file).
Note: To read a PDF file you must have Adobe Acrobat Reader installed on your computer - it's available free from Adobe Systems.
